Investors bank on US GDP growth above 2% but 'raging optimism' might make it less likely

BCA research

Markets and investors are expecting US GDP to rise beyond 2%, but "surging animal spirits" are working against the goals of Fed chair Jerome Powell and president-elect Donald Trump to maintain financial stability and spur growth.

According to BCA Research, investors have largely abandoned the idea of a recession, with GDP growth expectations now the highest since 2022. Recent economic data has been encouraging in this sense, with the US Bureau of Economic Analysis showing that US GDP grew by 2.8% on a year-by-year basis in the third quarter of 2024. However, the BCA flagged "animal spirits" as a potential source of impact on growth. Trump inflationary risks force economists to temper Fed rate cut expectations - reports "Financial markets ultimately move depending on how reality compares to expectat...